The online marketplace Temu has agreed to store Texas customers' personal data on servers in the United States, test popular products for toxic substances every year and refund Texans who buy items that fail, under a settlement with the state filed in a Collin County district court.
Attorney General Ken Paxton announced the agreement Friday.
Texas sued Temu's operator, Whaleco Inc., and its parent, PDD Holdings Inc., in February in the 471st District Court in Collin County, alleging the shopping app misled consumers about the data it collects, about discounts and free-item promotions, and about the quality and safety of goods, and failed to disclose that Texans' data could reach the government of China.
The companies deny each allegation and any violation of law, according to the agreed final judgment, which both sides signed Oct. 15. The judgment says the case was settled without any finding of fact or admission of liability. In the copy the attorney general's office posted, the judge's signature line is still blank.
What the deal requires
- Data: Temu must keep Texans' personal data on U.S.-based servers owned and controlled by Americans and limit access by people and entities in China, with exceptions for essential business functions. An independent firm will audit compliance yearly, and each failed audit carries an $8 million penalty.
- Products: Temu must pull recalled products within two business days of a U.S. or Texas recall notice and hire an independent firm to test commonly bought items every year for lead, PFAS chemicals, phthalates, formaldehyde and heavy metals.
- Refunds: When a product exceeds a federal safety limit, Temu must remove the listing, cut off the seller and any affiliated stores, alert Texas buyers and give them full refunds.
- Money: Temu will pay Texas $3 million in civil penalties, attorney's fees and costs within 30 days after the judgment takes effect.
